Nation's inflation rate rates little long-term concern

“The Consumer Price Index was unchanged for July, and over the past 12 months it has risen at a 1.4 percent annual rate, according to the Bureau of Labor Statistics,” the website states. “That's well below the Fed's target range of 2 percent.”

Long term, BusinessWeek.com notes, “The gap between nominal 10-year Treasury yields and the yield on 10-year Treasury Inflation Protected Securities says investors anticipate consumer price inflation will average about 2 percent over the next 10 years.”

But the website says a model of inflation expectations developed at the Cleveland Fed predicts the inflation outlook may be even better.

“The model matches inflation expectations from three sources — the Blue Chip forecasts, the Survey of Professional Forecasters, and inflation swap derivatives,” according to BusinessWeek.com. “The latest reading of 10-year expected inflation is 1.26 percent.”

Among the factors keeping inflation in check are “a global financial flight from Middle East turmoil, the ongoing European debt and currency crisis (and) the slowing Chinese economy,” which have pushed down the yield on safe-haven U.S. Treasuries, the story notes. And price pressures have remained contained during a weaker-than-expected recovery with lingering high unemployment.

In the cards

Regional banks, including Cleveland-based KeyCorp and Columbus-based Huntington Bancshares, “are taking back their credit-card businesses that were outsourced to big card issuers more than a decade ago as they work to counteract weak loan demand due to the slow economic recovery and profit margins squeezed by low interest rates,” according to this story from MarketWatch.com.

Credit card defaults “are low right now, and bankers have a better understanding of managing the business,” says Leigh Allen, a managing director with Kessler Financial Services LP, whose firm advised Regions Financial Corp. and KeyCorp in buying back their card loans to restart their own credit-card businesses.

"It's quite feasible for a regional bank," he tells MarketWatch.com. Banks “are awash with liquidity" from customer deposits, Mr. Allen says, adding, "The issue for them right now is how to generate good earnings assets.”

The story notes that both Key and Huntington “have decided it is time to issue their own cards again. Their aim is to generate revenue from credit-card loans that carry higher interest rates than most other loans and to get a tighter grip on their customers' finances by cross-selling more products to them.”

He tells MarketWatch.com that capturing its own banking customers and having them make purchases with a Key card will provide enough growth to generate attractive returns.

About three weeks ago, Key bought its $725 million credit card loan book managed by U.S. Bancorp's payment-processing subsidiary, the story notes. The bank expects to grow that portfolio more than 10% for the next 18 months and "modestly" thereafter, Mr. Bowen tells MarketWatch.com.

CNNMoney.com ranks the nation's housing markets and determines that Youngstown and Dayton are the most-affordable places to buy homes. The rankings are based on data from the National Association of Home Builders and Wells Fargo Bank. The website assigns an “affordability score” representing the percentage of homes sold in a metro area that a family earning the median income can afford to buy.

With a median home price of $80,000 and rising median income (thanks, shale) of $55,700, Youngstown gets an affordability score of 93.4%, the best in the country. It's not necessarily something to brag about, though.

“When the (steel) industry left in the 1970s, there was little economically for the city to fall back on. The people fled,” the website says. “Youngstown's population has dropped 7% since 2000, and there are tons of vacant homes with few buyers.”

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Reuters reports that British Columbia-based newspaper publisher Black Press Ltd. — the company that publishes The Akron Beacon Journal — “is proposing a C$13 billion ($13.2 billion) refinery on Canada's West Coast to process all of the oil-sands-derived crude that would flow through Enbridge Inc's contentious Northern Gateway pipeline from Alberta.”

Company owner David Black says the plant would process up to 550,000 barrels a day of crude at a site near Kitimat, British Columbia, the terminus of the proposed C$6 billion Northern Gateway. That would make it the biggest refinery in the country, Reuters reports.

Last month, the news service notes, British Columbia Premier Christy Clark “caused a stir” by saying her government will not support the pipeline that would cross the mountainous province unless British Columbians can get more money to compensate for the environmental risk.